After a short-lived revival in the first week of the month, international wheat prices have since been on the decline again. On top of the prospect of a record world production in 2008 and large exportable supplies, particularly in the Black Sea region, the firmer US dollar, further weakening of crude oil prices and world financial crisis are also behind the downward price pressure. The US wheat (No.2 Hard Red Winter, f.o.b. Gulf) averaged USD 247 during November, USD 5 per tonne below the October average and 26 percent down from the November average last year. Wheat futures strengthened at the end of the month, largely on concerns over wet weather delaying harvest in Australia and continued dryness weighing on production prospects in Argentina. The CBOT March futures reached USD 204 per tonne in the last week of the month, an increase of nearly USD 10 per tonne from the previous week. However, wheat futures remain 38 percent down from the same period last year and 58 percent below their peaks in late February 2008.
International maize prices have generally been on the decline since June, when favourable global crop prospects and indications of a likely abundance of feed wheat in world markets started to pressure markets downward. As for wheat, prices increased in the first week of the month but declined in the second week influenced also by a stronger US dollar, further drops in crude oil prices and fears over the implications of a global recession, such as significantly lower feed demand. The US maize (No. 2 Yellow, Gulf) averaged USD 166 per tonne in November, USD 15 per tonne below the October average and about 3 percent below the November average last year. The CBOT March futures closed in November well down from the levels at the start of the month, and now stand 54 percent down from the peak in June 2008.
Expectations of record 2008 paddy crops in the northern hemisphere and subdues world demand, are keeping downward pressure on rice export prices. The price of the benchmark Thai white rice 100% B averaged USD 591 per tonne in November, USD 92 per tonne down from the October average, although still well above (65 percent) the price at the same time last year. However, export quotations may have fallen further had it not been that they remain sustained by the Thai government procurement programme, to which producers are selling heavily, as prices paid under the scheme are currently above market levels. Slow arrivals of new supplies, due to flooding problems, and trader purchases for delivery to the Islamic Republic of Iran and Iraq have also prevented prices from falling more heavily. In all the other major sources, in particular Viet Nam, Pakistan and the United States, export prices have been under stronger downward pressure, with some now approaching the levels observed in December 2007.
|